Why B.C. municipalities are setting up their own housing authorities

Burnaby’s new housing authority is aiming to offer units at 50 per cent below market rents

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The housing crisis has pushed more B.C. municipalities to set up their own housing authorities to fund below-market rentals, a move one mayor says is in response to the slow pace of funding from B.C. Housing.

Burnaby Mayor Mike Hurley has been vocal about the provincial funding backlogs that delay the creation of badly needed below-market housing, even as B.C. Premier David Eby has blamed some municipalities for resisting density in some neighbourhoods.

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That’s why the City of Burnaby — which has the third highest rents in Canada according to a recent report — is setting up its own housing authority with the goal of building rental housing offered at 50 per cent below market rate.

“I hope it’s a message to B.C. Housing and CMHC (Canada Mortgage and Housing Corporation) that we’ve got to get those projects online and we’ve got to give people opportunities to live in rental homes,” Hurley said this week. “I think municipalities are seeing that what we’re doing is not working. We have to use every tool we have to move these projects forward or we’re not going to have any workforces in our city.”

The central ethos of the Burnaby Housing Authority is to create homes that rent at 20 per cent below the Canadian Mortgage and Housing Corp.’s median rate for an area, which would put it at 50 per cent below market rents.

The authority, a city-owned corporation which will be operational by early 2024, will develop new rental housing on either city-owned land or new land that’s acquired. Some properties will be built in partnership with developers and, in some cases, the Burnaby Housing Authority will develop the rentals itself, Hurley said.

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“The real advantage is it allows us to move projects forward quicker,” Hurley said. “We can start them even while we’re in the application process (for provincial and federal funding), which we’re finding just takes way too long.”

Burnaby is cash-rich with $120 million in its affordable housing reserve, largely thanks to a development boom which saw developers pay amenities cash in exchange for the construction of high-density buildings.

The authority will also buy existing older rental buildings to protect them from redevelopment, thus protecting low-rent tenants from eviction.

An Air Canada flight passes behind condo towers in Metrotown. In 2010 when developers scooped up land in the Metrotown area and razed affordable walk-up rentals to make way for high-rise luxury condos. Photo by DARRYL DYCK /THE CANADIAN PRESS

Such large-scale demovictions were rampant in Burnaby starting in 2010 when developers scooped up land in the Metrotown area and razed affordable walk-up rentals to make way for high-rise luxury condos. The promise at the time was that increased density would keep rents and condo prices affordable. When that proved not to be the case, Burnaby residents retaliated against then-mayor Derek Corrigan by voting him out of office in 2018.

Since Hurley took over the mayor’s seat, he’s been praised for the speed at which council has given the green light for affordable housing projects.

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Several other municipalities and regional governments have their own housing authorities that partner with non-profit agencies to build below-market housing using a mix of provincial and federal funding.

For example, Whistler’s housing authority, set up in 1998, has been instrumental in creating 2,200 units of below-market housing to ensure Whistler residents — many of whom work in the hospitality trade that fuels the economy — have a place to live. The Capital Regional District and Metro Vancouver both operate housing agencies that rely on a mix of regional, provincial and federal funding to build subsidized housing.

The City of Toronto’s community housing agency has grown to become the country’s largest provider of social housing, with 58,000 units housing approximately 105,000 residents.

A local-level housing authority doesn’t replace the need for provincial or federal investment, said Jen Ford, president of the Union of B.C. Municipalities and a Whistler councillor who previously chaired the Whistler Housing Authority. Rather, it provides municipalities greater control over projects while ensuring a “three-pronged approach” to housing with a buy-in from all levels of government, she said.

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Earlier this year, the City of Surrey revived its for-profit Surrey City Development Corporation. It was originally created in 2007 but went dormant under former mayor Doug McCallum.

While the corporation’s mandate includes housing, the focus is on partnering with the private sector to build commercial and industrial projects, said its executive director Michael Heeney.

“We are looking at ways of increasing housing, but we’re not a social housing agency of any sort,” Heeney said.

Heeney worries that more municipalities are creating their own housing authorities out of “desperation” in response to the “unbelievably irresponsible” downloading of housing responsibilities by senior levels of government.

“The problem right now is we have senior governments which are a little bit too removed from (the problem) and you’ve got the city governments which are close to it but don’t have the funding,” said Heeney, a builder, architect and urban strategist.

ravi kahlon
Housing Minister Ravi Kahlon with NDP Victoria-area MLA, and Premier David Eby April 3, 2023. Photo by Felipe Fittipaldi /Government of B.C.

Housing Minister Ravi Kahlon disputed the narrative that B.C. Housing isn’t getting money out the door fast enough.

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“If you look at the historic amount of funding that we have in place, at no time in B.C. history did we have this type of investment in housing,” Kahlon said.

While Kahlon applauded Burnaby’s initiative on below-market housing, he noted B.C. Housing in June announced $253 million in funding for six developments with a total of 1,500 affordable rental homes.

B.C. Housing CEO Vincent Tong, who was appointed in April to replace former CEO Shayne Ramsay — who was replaced following a conflict of interest investigation — was not available for comment despite repeated requests. B.C. Housing staff said Tong wouldn’t be available for an interview until September.

Adam Olsen, B.C. Green party MLA, said he’s frustrated by the hypocrisy of Eby and Kahlon who point the finger at municipalities for resisting higher-density housing — which resulted in mandatory housing targets for 10 municipalities — while shovel-ready, below-market housing projects languish because of a lack of provincial funding.

“They’re pointing the fingers at everybody but themselves,” he said.

jill atkey
Jill Atkey Atkey worries that city-owned housing corporations could change their priorities from one election to the next. Photo by Arlen Redekop /PNG

Insufficient federal and provincial funding and slow development approvals are stalling below-market projects from non-profit housing providers, said Jill Atkey, CEO of the B.C. Non-Profit Housing Association. The Burnaby Housing Authority might be able to help speed up approvals at the municipal level, she said, but it won’t solve the funding problem and will become another housing agency putting its hand out for the same limited pot of cash.

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According to B.C. Housing’s community housing fund, B.C. municipalities have applied for funding for 13,025 units. Of those, 2,474 units were approved for funding in 2021.

Atkey also worries that city-owned housing corporations could change their priorities from one election to the next.

“You could have a new council come in and make a different set of decisions about those assets and wanting to extract revenue from them,” Atkey said. “And that’s what differentiates a municipal housing authority from non-profits which are largely community-held assets where the focus and the mission is toward affordability in perpetuity without it becoming politicized.”

Considering the high costs of materials and borrowing, Hurley’s plan to build rentals at 50 per cent below market rate is “ambitious,” said Andy Yan, director of the City Program at Simon Fraser University. Yan said Burnaby is responding to the problem of decades of underinvestment in non-market housing by building housing for specific populations, such as middle-income families, seniors and people with disabilities.

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“If he can make it happen, it’s absolutely respectable,” Yan said. “He’s going to have to bring in the Avengers of developers. That’s the type of expertise he’s going to have to bring in.”

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